Martin Lind stands in front of the club house at Pelican Lakes Golf Course on earlier this month in Windsor. Lind was one of the many people who suffered financially after New Frontier Bank failed five years years ago. Lind has since recovered, thanks in part to his partnership with Tekton Energy to drill on his land.

A couple of years ago, Tekton Energy drilled its first wells on Water Valley in Windsor. The partnership with Water Valley owner Martin Lind was integral to Lind surviving the aftermath of the New Frontier Bank failure, in which a massive loan of his was sold and called in. Lind said the partnership has helped him blend the industrial side of drilling nicely with residential living. This pump jack has been artuflly screened with landscaping in the Water Valley golf course.

Oil and gas storage tanks are hidden from the sight of houses and golfers on the Pelican Lakes Golf Course in Windsor. Water Valley Developer Martin Lind has used oil and gas drilling on his land to help recover financial from the failure of New Frontier Bank.

An odd sign sits above the electric motor that drives silent running oil pump at the Pelican Lakes Golf Course. Water Valley developer Martin Lind has used oil and gas drilling on his land to help recover financial from the failure of New Frontier Bank.

Oil and gas storage tanks are hidden from the sight of houses and golfers on the Pelican Lakes Golf Course in Windsor. As oil and gas grows in Windsor the city has begun regulating the sound an visibility of many oil and gas facilities.

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Five years ago, Martin Lind had the Midas touch. A development mogul throughout northern Colorado — the man and money behind the Colorado Eagles, the Budweiser Events Center, Water Valley and the Loveland-Fort Collins Airport — he literally couldn’t lose.

But one event almost brought him to his knees — New Frontier Bank failed, and it came crashing down on its borrowers with no mercy. In one day, borrowers big and small learned they were on the precipice of financial ruin — even Martin Lind, with his 20-plus years of business success.

New Frontier became the biggest bank failure in the nation on April 10, 2009. It was one of the few banks across the country that was completely liquidated, costing the FDIC $911.6 million as of December 2013.

Now, after five long years, Lind and other victims have clawed their way back and say they are stronger and better for it. Lind turned to his mineral holdings in oil and gas, and partnered with Tekton Energy, where he found some much-needed cash flow to survive.

“Just this last January, I realized I survived,” said Lind, in a small office tucked in a corner of his Water Valley headquarters in Windsor. “That’s when I could really take a big breath and say we survived.”

RIDING HIGH

Northern Colorado was booming from 2000-06. Lind, looking back now, said he simply couldn’t lose.

“If it would have been Vegas, everyone would have been crowded around me at the craps table. Everything we touched was easy and worked,” he said.

New Frontier Bank was the one place in town everyone knew to get money, especially after being turned down by every other bank in town. It’s reputation as the money place grew like wildfire, and business in northern Colorado flourished.

“They’d lend you money and when it came due, they’d just lend you more money to pay it, and they’d do that for a couple of years,” said Byron Bateman, president of Cache Bank and Trust in Greeley, one of the few community banks left after the FDIC shuttered hundreds of banks across the nation and rewrote the rules, which had the effect of driving the little guys out of the market. “At a lot of banks in town, if you had a loan that was starting to look a little iffy, you just sent them to New Frontier.

“It wasn’t meant to be a big conspiracy,” Bateman said. “I had several loans we were starting to squeeze, and they’d come in here saying they got refinanced at New Frontier.”

Area bankers wondered how New Frontier was managing to grow as much as it did. In its short 10 years, it grew from $6 million in humble beginnings to become a $2 billion bank. Instead of relying on core capital to grow, New Frontier relied heavily on “hot money” or overnight loans to pay out the incredible interest rates they were offering customers.

“The reality is they were probably less than $100 million of real core deposits in the bank,” Bateman said of New Frontier. All banks’ books are public and bankers often look at each other’s finances for competitive purposes. All bankers in northern Colorado were watching New Frontier.

By the time regulators closed the bank, New Frontier recorded more than $98 million in losses, and more than $107 million in agriculture loans had already gone sour.

The bank’s liberal lending policies led to massive loan failures as the economy worsened in 2008 into 2009; then rumors of a federal shutdown led to a run on the bank from January to April, during which time it lost about 11 percent of its core deposits, making it more necessary to rely on overnight funding.

Original estimates were that the bank’s failure would cost the FDIC’s insurance fund almost $700 million. That’s ballooned up to just shy of $1 billion today.

Lind, though highly leveraged in that time, had one loan with New Frontier — he’ll only reveal that it was in excess of $10 million — and he was current on his payments.

“My company got big in that time,” Lind said. “We had lots of loans and projects (at several community banks). But we had a tsunami of bad. First there was the tornado (May 22, 2008, which leveled much of Windsor’s east side). I had one Wall Street bank come in right after and froze our lines of credit, and they called all of our notes in.”

The stock market plummeted.

Then New Frontier Bank failed. Then came the Great Recession.

THE AFTERMATH

Few knew what they were up against when New Frontier closed. Most, who just had checking or savings accounts, had 30 days to move their money to new banks in town, resulting in somewhat of a boon to other bankers.

They’d walk past armed guards in a bank that once welcomed customers into the building as family.

Lind had only one loan with New Frontier, but it was bigger than most local banks could handle. He wasn’t sure where he’d shop it.

“That was a real brutal and hostile period,” Lind said. “At first the answer was, ‘Well, pay it off.’ ”

Lind said his loan, though current and based on his years of good business dealings and reputation, became toxic overnight. The FDIC decided speculative loans — basically loans to develop property without guaranteed tenants or buyers — were no longer bankable, as such loans continued to falter throughout the national economy.

Lind had such a loan — it was for a commercial development near the Budweiser Event Center in Loveland — and no one could touch it, as the rules changed overnight. The next month would become a chorus of no from every financial institution he called.

LIND’S SOLUTION

Lind tried to buy back his loan for 85 cents on the dollar. The FDIC refused, put it up for auction in a large bundle with a host of bad loans and got 30 cents on the dollar for all of it.

“The FDIC isn’t a bank, they didn’t want a lending portfolio. They just wanted out,” Lind said. “The more dire of a picture, the quicker it was out and auctioned off.”

Lind finally threw up his hands on finding new money. He worked with the bank that bought his loan and put basically all of his cards on the table.

“I was all in,” Lind said. He leveraged everything, his home, his businesses, property that was free and clear that he worked 20 years to pay off. “Literally, there was no trust for the kids, there was no college account that was exempt. It was all in...

“It was so complex and such a cheese maze with such a tiny exit hole. The odds of pulling it off were slim. … If I’d not been successful, I might have got to keep my clothes, unless my pants size was the same size of some FDIC director.”

He hired experts to put together his exit strategy, using the cash flow he had from his mineral rights and his other recession-proof businesses, with an aggressive debt reduction schedule.

“It was a big, complex giant strategy with everything considered, every lender, every car payment, everything was in,” Lind said.

OIL AND GAS ANGEL INVESTMENT

Unlike the rest of the country, Colorado’s oil and gas scene started heating up just about the time the economy was at its lowest.

New discoveries in technology and drilling techniques made what was once a typical oil play into a blockbuster in Weld County.

The industry started pumping in jobs, good paying ones. More people meant more disposable money, more spending on necessities such as housing and food.

Suddenly, there was strong demand for housing; the restaurant scene lit up, all of it helping a sputtering engine begin to purr.

Lind, a former farmer who had massive acreage in northern Colorado, also held on to his mineral rights. And he knew his land. While he waited for values to return to normal, he worked the subsurface.

“I had a lot of core knowledge of how to coordinate oil and gas with urban development, and how to not be greedy with either one, and make sure residents aren’t negatively affected by industry,” Lind said. “We knew we had the minerals, we knew we had value. We had the opportunity to sell, but then when you do that, you lose an awful lot of control. We had opportunity to do business with much larger companies, but I had done that before, and I really like being in position of principal to principal, a phone call away, and looking the guy in the eye. That was real important, more than revenue.”

In 2011, Tekton Energy, a small, independent exploration company out of the Denver area, came looking to find a niche in drilling below Windsor.

Tekton CEO and founder Jerry Sommer said the partnership with Lind has been key for him, as well.

“I was looking for something, a good first project that would have some good results and significant upside, and we found Martin Lind,” Sommer said in an interview late last year. “To have bumped into Martin and this idea, he’s a clever, clever businessman, and he’s an aggressive, big thinking visionary, and over last few years he’s become a friend of mine.”

But it took some time for the cash flow to become regular.

“There was some early cash flow, just from pure deal of leasing the land,” Lind said. “Everyone thinks if you see an oil rig, there’s cash flow. It’s usually six months to year from the time you see the rig, until the time you get a predictable royalty check, so it wasn’t quick.”

Lind artfully found ways to drill on his land near homes and walking paths, hiding the industrial use with landscaping. One such area, that now has a tank battery on it, is surrounded by housing, and the site blends in the natural environment.

“You’ll see big sound walls while they’re building, but that’s no different than looking at a house under construction,” Lind said. “When the curtain gets pulled on the finished product, there’s earthen berms, landscaping and fencing that’s more park-looking and nobody would hear, see or smell it.”

“To do that right, you have to give a lot of land and you can’t be greedy, and don’t try to shoe horn it in. That’s what we’re good at.”

Lind sees the value to not only himself, but the property owners on his developments.

“What’s really cool in America, is a lot of times property owners have their mineral rights,” Lind said. “When it goes to individual royalties, the spread of wealth is so great. Someone that’s struggling can go to the mailbox, get a $500 check and have a car payment covered. That has a giant ripple effect, aside from the obvious, which is core jobs, which are fantastic.”

Lind said he couldn’t have recovered without the oil and gas piece of the equation.

“You bet it was a saving grace,” Lind said. “It’s a patient, coordinated, blended effort to let two industries co-exist. The oil and gas industry is literally bigger than any of us know. It will have a bigger effect on northern Colorado than any of us can imagine.”

From an oil family himself, Byron Bateman of Cache Bank and Trust has seen the wealth from oil and gas that has been infused in the economy.

“Oil and gas has been a very refreshing industry that’s expanding here with a great play,” he said. “Yeah, you’ve got your peaks and valleys, but to be a part of a play like this, it brings all those other suppliers and others in to build more foundation in other industries. Without it, we’d be further behind.”

Patty Gates, market president for FMS Bank in Greeley, which took over the old New Frontier Bank building in Greeley, said all anyone has to do is drive around town to see the effects.

“You see the trickle down effect of oil and gas in all the ancillary business. They’re buying vehicles, staying in hotels, eating out, buying clothes,” Gates said. “Economists can throw all the numbers at I, but that clearly had been a huge part of the recovery.”

BURYING THE GHOST

For years, the New Frontier Bank buildings on 35th Avenue sat empty. Once a bustling financial center for customers, and a social club for area seniors, the buildings, which represented the opulence of a billion-plus bank, became like a black cloud, a bitter memory of arguably the worst financial event in Greeley’s history.

“It was heartbreaking to drive by this building,” Gates said. “Number 1, it’s beautiful, it’s a well-traveled street. It was really hard to drive by and see it sit empty for all those years.”

FMS, based out of Fort Morgan, bought the north building and opened in October 2012. A south office building, attached to the bank by a covered bridge, later was sold to become Kaiser Permanente to convert into a health clinic. The bridge was taken down to permanently separate the two sides.

Gates, who now does her work from the same office as former New Frontier president Larry Seastrom, said the disaster of April 10, 2009, came full circle as the new signage was placed on the building.

It took a concerted effort, Gates said, as even to this day, the bank sees people in the community who are still impacted by the loss. But more than not, FMS bank is gaining its own identity.

“We don’t have to say, ‘it’s the old New Frontier Bank building.’ We made a conscious decision to try not to say that. We really wanted that to be put to rest,” Gates said. “We love this building. We think we’ve done great things with it. We think we’ve buried the New Frontier ghost.”

The FDIC status report on New Frontier’s assets show still the agency believes there’s $91 million in liquidity value in left in the remaining assets.

“In retrospect, I wish the FDIC had a different method of closing banks as far as orderly liquidation and giving people more time to move out,” Gates said. “Had they been able to bring in a new management team, the losses to the FDIC would be a third of what they are.

“But it had to stop. The New Frontier model of banking had to stop,” Gates said. “They couldn’t continue to support the way they were doing business. The impact on the community was devastating.”

RECOVERY

Cluttered with plans and paperwork atop 12-year-old carpet, Lind’s office overlooks the front nine on his Pelican Lakes Golf Course and Country Club that are seeing some renovation after years of neglect.

His plans to kick-start the restaurant and club had been deferred long enough.

“A recession like that with all the belt tightening makes you defer a lot of maintenance,” Lind said. “Chairs that are broken you duct tape, and a lot of that takes time to catch up. We’re just going to reinvest in our core.”

To get there, he had to cut corners everywhere he could. He probably laid off 20 percent to 30 percent of his staffs.

He found ways to tighten, he found weakness and worked to reboot.

“I found employees who were stealing from me, we found poor business practices I was doing because we were too cavalier about some things,” Lind said. “We were too reckless, too much of the it’ll-be-OK attitude. It was good for the company.”

Today, that’s changed. Lind says no a lot more now. To this day, he’s not yet gotten a new loan on anything.

“We did do some replacement loans with other lenders that consolidated portfolios and shored them up with more equity,” Lind said. … All we did was consolidate and refinance. To this day, I still haven’t borrowed any new money.”

He doesn’t plan to, either.

The economy has picked up and land values — which FDIC appraisers devalued immensely just a few years ago — are back to what they were in 2005 and growing, Lind said.

With some of the oil and gas industry, including diversification, higher real estate values, more jobs and home sales, and re-establishing incentives to open a small business, recovery is humming along.

“I think we’ve digested most of the negative impact,” Bateman said.

Lind plans to build from within.

“Commercially, I think we have 10 years to go (within Water Valley),” Lind said of the development he has left to build. “With Tekton, we have a decade or so of figuring that all out too, and making sure it’s all in harmony.”